The Pension Fund Regulatory and Development Authority (PFRDA) is a statutory body established by an Act of the Indian Parliament, the PFRDA Act, 2013. It functions under the jurisdiction of the Ministry of Finance. The Authority's objective is to promote old-age income security by establishing, developing, and regulating pension funds and protecting the interests of subscribers.
The origin of the PFRDA traces back to the Old Age Social and Income Security (OASIS) report commissioned by the Government of India in 1999 to assess income security for senior citizens. Based on its recommendations, the Interim Pension Fund Regulatory and Development Authority was first established through a resolution on August 23, 2003. This interim body was created to streamline the pension sector and was followed by the introduction of the National Pension System (NPS) on January 1, 2004, which replaced the Defined Benefit Pension System for new government entrants. The PFRDA received its statutory status when the PFRDA Act, 2013, was passed, with presidential assent on September 19, 2013, and notification on February 1, 2014.
The PFRDA works by regulating the pension sector, primarily administering the National Pension System (NPS) and the Atal Pension Yojana (APY). Key provisions of the PFRDA Act, 2013, include Section 3, which establishes the PFRDA as a corporate body, and Section 7, which outlines its functions, such as regulating and licensing pension funds and protecting subscribers' interests. The Authority registers and regulates various intermediaries like Pension Fund Managers (PFMs), the NPS Trust, and Central Recordkeeping Agencies (CRAs).
The PFRDA connects to other financial regulators like the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), as it operates as an autonomous quasi-government body. Recent changes include the notification of the National Pension System Trust (Second Amendment) Regulations 2023 and Pension Fund (Amendment) Regulations 2023 in February 2024, which simplify provisions and enhance disclosure in line with the Companies Act, 2013. Furthermore, the PFRDA has introduced a Multiple Scheme Framework (MSF) for non-government subscribers, allowing for more investment choices, including up to 100% equity portfolios, and has liberalized exit and withdrawal norms. The core function of regulating the NPS and APY remains the same, but the framework has been made more flexible and subscriber-centric.